Bybit’s Lazarus Security Lab has released a groundbreaking report revealing that 16 major blockchain networks have built-in capabilities to freeze or restrict user funds. The report, titled “Blockchain Freezing Exposed: Examine The Impact of Fund Freezing Ability in Blockchain,” marks the first comprehensive analysis of how blockchains can intervene in user transactions to address security incidents such as hacks and exploits.

The study examined 166 blockchain networks using a combination of AI-driven analysis and manual review. Researchers discovered that while 16 chains currently possess freezing functions, an additional 19 could implement them with relatively minor protocol adjustments.

Types of Fund-Freezing Mechanisms

The report identifies three distinct types of fund-freezing mechanisms: hardcoded freezing, configuration-based freezing, and on-chain contract freezing. Hardcoded freezing is integrated directly into the blockchain code, as seen in BNB ($969.40) Chain and VeChain. Configuration-based freezing is managed through validator or foundation settings, exemplified by Sui and Aptos. On-chain contract freezing is executed via system contracts, such as those on HECO.

Several notable cases were highlighted in the study. Sui froze $162 million in stolen assets following the Cetus hack, while Aptos introduced blacklisting functions after the incident. BNB Chain utilized hardcoded blacklists to contain a $570 million bridge exploit, and VeChain set an early precedent in 2019 by freezing funds from a $6.6 million breach. Cosmos’s modular account design may enable similar interventions in the future.

Implications for Blockchain Governance

These interventions demonstrate how fund-freezing functions can serve as emergency tools to protect users and mitigate damage during large-scale security breaches. David Zong, Head of Group Risk Control and Security at Bybit, stated, “Blockchain was built on the principle of decentralization — yet our research shows that many networks are developing pragmatic safety mechanisms to respond quickly to threats.”

Bybit’s Lazarus Security Lab developed an AI-assisted detection framework to scan codebases for modules enabling blacklisting, transaction filtering, or dynamic configuration updates. Human researchers validated each case to ensure accuracy.

The study concludes that transparency around emergency intervention mechanisms should become a core pillar of blockchain governance, urging projects to publicly disclose whether and how they can intervene in on-chain activity. “As crypto matures, clear and transparent safety mechanisms will help build lasting trust among users and institutions,” the study concludes.

The full research, “Blockchain Freezing Exposed: Examining the Impact of Fund Freezing Ability in Blockchain,” is available here.

Why This Matters: Impact, Industry Trends & Expert Insights

Bybit’s Lazarus Security Lab has uncovered fund-freezing functions in 16 major blockchain networks, highlighting a significant development in blockchain security mechanisms.

Recent industry reports indicate a growing trend in blockchain security focusing on real-time detection and prevention of unauthorized transactions. This aligns with Bybit’s findings, emphasizing the need for rapid intervention tools to address security breaches effectively.

A Forensic Risk Alliance report highlights that fund-freezing mechanisms are increasingly viewed as critical in regulatory and security contexts. This supports the significance of Bybit’s report in advocating for transparency and robust governance in blockchain networks.

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